Thursday, Mar 25, 2004
Paladin Resources, now the biggest independent producer of oil and gas, has reaffirmed its target of more than doubling production by 2008 to 100,000 barrels of oil equivalent per day.
The company took over the top spot from Premier Oil after recent corporate restructuring and disposals last year left Premier about half its previous size in terms of reserves and production. Paladin increased production last year by 44 per cent to 42,006 boe/d while proved and probable reserves rose 23 per cent to 132.7m boe/d.
Paladin sees itself as a scavenger, spotting assets in which big oil groups are no longer prepared to invest. Its operations are concentrated in the British, Norwegian and Danish sectors of the North Sea but it also has assets in Indonesia and Tunisia. Yesterday, it remained confident of making more acquisitions.
But Roy Franklin, chief executive, said output would rise to about 70,000 boe/d by 2007 even without further acquisitions or exploration successes. In 2004, Paladin is planning to spend about Pounds 75m to boost output from existing assets as well as Pounds 11m on exploration.
Pre-tax profit for the year ended December 31 rose from Pounds 66m to Pounds 84.8m on turnover that increased 58 per cent to Pounds 268.2m (Pounds 170.2m). Earnings per share were 8.92p (7.76p).
Paladin, one of few independents to pay a dividend, proposed a final dividend of 1.05p a share for a total of 1.575p for the year, up from 1.5p in 2002. Shares in Paladin rose 2 3/4p to 106p.
FT Comment
* Paladin's strategy of growing organically and through incremental add-ons is proving successful. Even with Pounds 110m net debt, analysts say that Paladin can still feed its acquisitive appetite. For 2004, Oriel Securities forecasts a pre-tax profit of Pounds 86m and earnings per share of 8.5p. Paladin is trading at a premium to the sector. But many of the independents have seen their ratings boosted by the recent exploration success of Paladin's peer Cairn Energy and the impact of high oil prices. Shares in Paladin have surged more than 40 per cent in the past year but they could still go further if the scavenger can serve up more of the same.
By JOANNA CHUNG
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